Lynne of Left in Lowell fame interjects in the comments section,
I hate free trade. NAFTA and all of it. Stupid rules that only hurt the little people, but benefit large corporations.
I do, however, adore fair trade. If we did it right, with environmental protections (and not allowing, say, one place TO GET SUED by a big corp for stringent environmental protections), worker protections, and fair prices for goods and services, then I say let’s go for it.
I can agree with the sentiment, but have to counterassert that while certain little people really do feel the brunt of the industrial changes exacerbated by free trade, many more little people’s lives are substantially improved by it and in generally it’s a net gain for our economy, including that seen by the “average” person. I’ve written some on the topic, but probably the best and most concise statement of the free trade argument is Paul Krugman’s essay In Praise of Cheap Labor. The crux of his position: “A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.”
That’s why writing in provisions like environmental standards, worker protections and fair pricing is in effect protectionism under another guise: it protects the “good jobs” in Central America or wherever in principle but assures that in practice they won’t form in any appreciable number. (And if fair pricing refers to non-market prices, then you’re not even talking about trade agreement, you’re regulating the specifics of international commerce Soviet-style: who’s going to set the prices?) And it’s why fair trade may be a fine niche market in itself but won’t provide the economic transformation from import-export economies to industrial economies that the Third World needs if it wants to feed and house its people.
I’m certainly not for rigging the rules against more environmental protection in Third World countries (which CAFTA may well be trying to do), but in practice, the dynamic works equally the other way, with WTO keeping the US from unfairly renegging on our trade deals, as we have a tendency to do sometimes. In fact, a trade agreement has to have some international regulatory body with ability to overturn sovereign laws. Otherwise, countries seek to protect industries could draft up protectionist laws - say, “environmental protection” which in fact does not protect the environment but rather a specific industry. You need some body to adjudicate on these to be able to tell which laws are protectionist and which ones aren’t.
As for NAFTA, some sectors have been hurt (though sorting out the effects of trade with Mexico, from trade with other nations and non-trade sources of industrial decline is a tricky matter). But it’s clear that the doomsday predictions about that trade agreement never came to pass. It’s true we have more growth in service jobs and more decline in unionized factory jobs, but we also have more white-collar jobs than we did before, yet those are taken for granted. However, it’s all part of the same thing. Cheaper industrial goods mean selected factory closings, but they also mean higher real wages for everyone else (not just CEOs).
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